Strategy Note /

Thailand:Thai Market Strategy-1Q21 earnings preview:Big YoY jump from a low base

  • 1Q21 SET bottom-line set to jump by 83% YoY and 21% QoQ

  • 2Q21 SET net profit to surge 71% YoY

  • Better earnings revision breadth in March-April

Poramet Tongbua
Poramet Tongbua

Equity Research Analyst

Bualuang Securities
12 April 2021

1Q21 profit will mark a strong YoY jump from the low base set by 1Q20 (non-operational losses), though core earnings will still fall YoY (but shallower than for 4Q20). The overall recovery remains slow, due to new COVID-19 outbreaks and measures imposed to combat them in January (and April). The vaccine rollout should build steam by mid-year, enabling a strong recovery in 2H21. Several stocks have retreated recently in response to the COVID-19 outbreak in late March, which opens an opportunity for re-entry along with other catch-up and value plays that stand to revitalize as the economy normalizes in the months ahead.

1Q21 SET bottom-line set to jump by 83% YoY and 21% QoQ

We expect the posted 1Q21 aggregate SET net profit to jump by 83% YoY and 21% QoQ. For core earnings, we estimate a 2% YoY dip but an 18% QoQ rise. The sectors most likely to post YoY core profit growth exceeding 10% are Chemical (fatter product spreads and greater sales volume), Energy (average oil price up 20% YoY and a fatter GRM; added capacity among power plants), Electronics (higher sales), Property (greater transference for both ResProp and Industrial Estate stocks), Construction Materials (sales volume expansion and fatter chemical product spreads for SCC), and Insurance (TQM’s strong revenue growth and lighter provisioning for BLA).